Richard Gluyas from The Australian says start-ups Xinja and Volt Bank, along with the 86 400 business owned by payments processor Cuscal, are in the vanguard of the new breed, which has been nurtured by the changes in the 2017 budget that created a “restricted” banking licence with streamlined application processes.
Richard points out the Productivity Commission was sceptical about the ability of foreign entrants or fintechs to seriously challenge the dominant position of the major banks, at least for now.
Australia will mirror the experience in Britain, where major-bank rivals ignored the arrival of neobanks in the first year. By the second year, they’ll realise that we’re real – CEO & Co-founder Eric Wilson
“…then in the third year they’ll be looking over their shoulders” – CEO & Co-founder Eric Wilson.
Richard confirmed that Xinja became the second recipient of a restricted banking licence last month. It is also undertaking a Series C capital raising worth between $10 million and $20m, including a crowdfunded component of up to $5m. The start-up has already launched its app and prepaid card, and is hoping to launch a transaction account next year.
XINJA™ (Xinja Bank Limited ACN 618 937 054) is authorised by the Australian Prudential Regulation Authority (APRA) to operate under a Restricted Authorised Deposit-taking Institution (RADI) licence until 16th December 2020. Under this licence we are not required to meet the full ADI prudential framework. We will only offer bank accounts to the general public when we become a full ADI. You can still apply for other Xinja products. More information about Xinja’s RADI licence is available at xinja.com.au/legal